The Fifteen Most Hated American Companies Of 2010

Customers, employees, shareholders and taxpayers hate large corporations for many reasons. 24/7 Wall St. reviewed many of these to choose the 15 most hated companies in America.

We examined each company based on six criteria. First, employee opinions, using research firm Glassdoor and other services, were reviewed.  Second, we considered total return to shareholders in comparison to the broader market and other companies within the same sector. Third,  we analyzed data from a broad array of sources, including Consumer Reports, JD Power, the MSN/Zogby Poll, and the University of Michigan American Customer Satisfaction Index. Fourth, we reviewed brand valuation changes based on data from Corebrand, Interbrand, and BrandZ.  Fifth, we considered negative press coverage based on 24/7 Wall St.’s analysis of media coverage and the Flame Index, which uses a proprietary algorithm to review more than 12,000 websites and ranks companies based on the frequency of certain negative words. Finally, the views of these firms by taxpayers, Congress, and the Administration were considered where applicable.

Some of the companies on this list are widely despised because of the businesses that they are in. An airline or cable operation, that has millions of customers in an economic environment  where its resources are stretched due to the economy, is likely to make a lot of enemies. Similarly, this puts banks and other firms with a large number of retail outlets at a disadvantage compared with companies with few customers. Some of the corporations on this list have also had to fire significant numbers of employees due to the recession. Downsizing causes poor morale, increase in work load for the remaining workers and affects customer satisfaction when there is poorer service.

Several companies which would have been expected to be to on the on this list based on performance and public perception during the financial crisis, for example, AIG (NYSE AIG), are not here. AIG became a pariah when the federal government spent huge sums of money to keep the insurer from going bankrupt However, AIG has since done a very good job selling off assets and improving earnings to pay back the money the federal government lent it. Its stock has nearly doubled over the past year. There is a chance that AIG could pay back all of its obligations to taxpayers.

GM (NYSE: GM) has faced similar obstacles, but its IPO and subsequent positive comments about the firm’s business make it more likely that taxpayers will not be burdened with the costs of the company’s turnaround. GM, which laid off tens of thousands of people from 2006 to 2009, has begun to add a modest number of workers.

It is worth noting that some of the companies on this list may have done very poorly in some of the measurements used and well in others. There are corporations among the most hated that have had good stock performances. There may be reasonable employee satisfaction at others. Each of these was taken into account when the decisions for the final list were made.

The following is 24/7 Wall St.’s Fifteen Most Hated Companies for 2010, in no particular order.

1. American Airlines
American Airlines (NYSE: AMR) made the list because of its dreadful customer service ratings and its poor on-time departure track record. These scores are surprising given that American is one of only a few large U.S. airlines that has not been involved in a merger or alliance – transactions that often lead to poor customer service. American’s stock has underperformed most of its peers during the last year. According to Glassdoor, only 36% of surveyed employees approve of CEO Gerard Arpey. American Airlines received a score of 63 on the American Consumer Satisfaction Index, the ninth-worst rating in 2010 out of 181 ranked companies. In the 2010 Travel and Leisure survey of best and worst airlines for delays, American Airlines was the worst large national carrier.

2. Nokia
Although it is the world’s largest cellphone company, Nokia’s (NYSE: NOK) reputation for the quality of its smartphones is in tatters. The company received the worst possible grades in JD Power’s 2010 Mobile Phone and Smartphone ratings for customer satisfaction for physical design, ease of operation and overall satisfaction. The only smartphone company with worse scores was Palm. According to a recent Brandwatch study, Nokia received the third greatest amount of bad press on Twitter. In Brand Z’s annual rankings, the Nokia name has lost 58% of its value in the last year. Shares of Nokia dropped 20% in 2010.

3. Toyota
Toyota (NYSE: TM) was known for thirty years in the United States for reliability that surpassed any domestic competitors. The automaker’s reputation was tarnished by  defect-related accidents, lawsuits and an 8.8 million vehicle recall. Because of this bad press, Toyota’s U.S. market share dropped from 18% in 2009 to 15.5% in 2010. In the JD Power’s 2010 Automotive Performance, Execution and Layout Survey, Toyota received the worst possible marks in comfort, style, and overall performance and design.

4. Best Buy
Best Buy (NYSE: BBY) rates low on several surveys for both its bricks and mortar stores and its e-commerce site. Recent research by both the Consumerist and Consumer Reports gave Best Buy among their lowest rankings. According to Consumer Report’s December 2010 electronics store ratings, Best Buy ranked as the third-worst bricks and mortar store, and  was designated as the worst online store. Best Buy has disappointed Wall Street recently by missing earnings forecasts. Its shares are down more than 10% during the last year, which is below the DJIA and stocks in its peer group.

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